Assistant manager Jaclyn Stafford works behind the sales counter at The Station, a retail and medical cannabis dispensary, in Boulder, Colo., Thursday, Aug. 11, 2016. The DEA announced that day that marijuana would stay on the list of the most dangerous drugs, or Schedule I, despite growing popular support for legalization. (Credit: AP Photo/Brennan Linsley)

Around the country, cannabis businesses face a fair mountain of red tape in trying to comply with different state and federal laws. A Colorado startup wants to help keep the legal industry rolling (and doing what it does best) by providing a one-stop shop for businesses' compliance and payroll needs, and it's already raking in the green.

The cannabis workforce compliance platform Wurk announced today that it has raised $2 million more in an extended seed round to help develop its growing operation in pot country and beyond, bringing its raised total to $3 million. In a press release, the company noted it would use the funds for "key executive hires" and to ramp up its expansion into new legal cannabis markets. The extended round was led by Poseidon Asset Management, with Phyto Partners, Salveo Capital and The Arcview Investor Network also participating.

The startup, a recent alum of Colorado-based business accelerator CanopyBoulder, has already been helping legal cannabis businesses in 12 states to manage their various requirements for operation per local and U.S. laws, as well as more routine HR functions. Wurk CEO Keegan Peterson commented in a release, “With eight new markets emerging in November, including the passing of Prop 64 in California and the new administration’s focus on compliance, we knew we would need to scale the business quicker to meet this demand.”

As TechCrunch reported, the startup previously raised one million from the Arcview Group, CanopyBoulder, and Poseidon Asset Management in November 2016 when kicking off its seed round. The Arcview Group--an investing organization comprising "hundreds of high-net-worth individuals evaluating deals in the emerging legal cannabis industry," TechCrunch explained--is also known among the green crowd for its periodic and optimistic industry outlook reports, courtesy CEO and Founder Troy Dayton et al.

At the time, Dayton commented, “If Wurk can get the growing number of dispensaries and cultivation centers to unplug whatever they were hobbling together before to run their businesses, all you have to do is look at the industry growth curve and extrapolate. They will be able to build a business that is long-term sustainable and delivers great returns.”

In an interview, Peterson explained some of the highs and lows that come with running cannabis businesses in a country that still won't green-light the plant or its booming industry at the federal level.

"Before Wurk, there wasn't a true payroll service cannabis companies could use, so we were born out of necessity." Peterson said. "A friend of mine owned a large dispensary in Colorado and had been dropped from multiple payroll services, and we created this to give such businesses the support they deserve."

As Peterson noted, finding such support has often been extremely complex for both veteran and first-time cannabis operators, as well as complying with different regulatory standards. "Each state is different--that’s what’s unique about the cannabis industry," he said. "Each state has its own regulatory body, such as Colorado's Marijuana Enforcement Division, that dictates what it needs from businesses for compliance."

"Depending on the state, some regulatory bodies require cannabis employees to undergo background checks, while others require employees to be assigned badges, and some need all new employees to be reported to [local] agencies," he explained. As "intermediaries," Wurk's representatives work with local and national agencies to determine what they expect from compliant cannabis businesses, Peterson said, and to provide the frequently complicated paperwork involved on businesses' behalf in an automated form.

A man lights up during the Denver 420 Rally, a celebration of both the legalization of cannabis and cannabis culture, May 21, 2016 in Denver Colorado. (Credit: JASON CONNOLLY/AFP/Getty Images)

Peterson also noted that compliance with a federal law known as 280E has presented the budding cannabis industry with particular challenges. The tax-based regulation arose under President Ronald Reagan in response to a particularly laissez-faire instance of creative and drug-related filing, Peterson said. "In short, a cocaine trafficker was writing off his boat and similar expenses because he was using them to transport his products," he explained. "The IRS said, 'let’s never let this happen again.'"

As a result, the agency worked with the Reagan administration to create law prohibiting those who traffic in federally illegal drugs from profitable moves across state or national borders, and from helping themselves to tax breaks that many other non-'illicit' businesses do, according to Peterson. And while cannabis dispensaries are subject to one set of rules under this law, preventing write-offs on everything from their brick-and-mortar properties to their employees, businesses which grow cannabis crops are subject to another, allowing them to write-off the labor involved. As a result, Peterson said, "some businesses are being taxed at 100%."

Even while 28 states and the District of Columbia now have medical or recreational cannabis laws on the books, the pressure to have businesses in ship shape continues to weigh on the industry, Peterson noted. "With the new administration, compliance is the most important part of this industry," he said. "Because we’ve solved a big part of the puzzle, we've gotten a lot of demand for our services, and averaged 100% growth over the last three quarters."

And despite the somewhat unnerving context surrounding Wurk's expansion, of course, 100% growth carries a whiff of good news in any industry.